The effects of internationalisation on domestic labour demand by skills: Firm-level evidence for Belgium
Ludo Cuyvers (),
Emmanuel Dhyne () and
Reth Soeng ()
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Ludo Cuyvers: University of Antwerp
Reth Soeng: University of Antwerp, Steunpunt Buitenlands Beleid
No 206, Working Paper Research from National Bank of Belgium
We empirically investigate the effects of the internationalisation of Belgian firms on domestic demand for production and non-production workers, which are used as proxies for unskilled and skilled labour. Distinction is made between home-employment effects of firms’ internationalisation, through either international trade or outward foreign direct investment, in highincome countries and in low-income economies. The results of our econometric analysis, using data over 1997-2007, suggest that increasing import shares from low-income countries or investing in those countries significantly reduces demand for low-skilled labour, while it increases demand for skilled labour. An increase in exports generally raises the demand for production workers, while it reduces the demand for non-production workers. However, these effects are reversed in the case of exports to low-income countries. Considering the impact of FDI, our results tentatively suggest that the setting up of a new international investment project has a positive impact on demand for non-production workers one period before it is made. This positive effect is offset in the long run, particularly in the case of investment in low-income countries.
Keywords: labour demand; international trade; outward FDI; skilled and unskilled labour (search for similar items in EconPapers)
JEL-codes: C23 F16 F21 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eur, nep-int and nep-lab
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Persistent link: https://EconPapers.repec.org/RePEc:nbb:reswpp:201010-206
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